Now that the furore about Modern Monetary Theory (MMT) has died down (other than the continuous pathetic strawman attacks), I am seeing a downtick in economic theory arguments that I find interesting. People are arguing about the details of fiscal policy and what is happening with inflation, which end up either being political or datamining time series.
"From the perspective of MMT, the answer is straightforward: the government should peg an important price in the economy, and build the policy framework around that constraint. The suggested “important price” is the Job Guarantee wage, which then acts as a base of comparison for private sector prices."
"MMT proponents suggest pegging interest rates at zero and using fiscal/regulatory policy to control inflation. The reality that critics do not even bother discussing such a policy framework is a sign that it is not happening any time soon."
I think you are identifying what I've started to call "unsolved problems and unasked questions" in MMT. I can fully understand how the Job Guarantee wage can potentially serve as "anchor" for the price system -- but what limits in its effectiveness would we see when the most important rising prices are set on world markets and are untethered from domestic production costs?
I also think that in the coming years we will inevitably see more use of fiscal/regulatory policy to control inflation, whether that is motivated by MMT or some other school of thought. But we're just at the very beginning of figuring out what such policies would look like.
"From the perspective of MMT, the answer is straightforward: the government should peg an important price in the economy, and build the policy framework around that constraint. The suggested “important price” is the Job Guarantee wage, which then acts as a base of comparison for private sector prices."
"MMT proponents suggest pegging interest rates at zero and using fiscal/regulatory policy to control inflation. The reality that critics do not even bother discussing such a policy framework is a sign that it is not happening any time soon."
I think you are identifying what I've started to call "unsolved problems and unasked questions" in MMT. I can fully understand how the Job Guarantee wage can potentially serve as "anchor" for the price system -- but what limits in its effectiveness would we see when the most important rising prices are set on world markets and are untethered from domestic production costs?
I also think that in the coming years we will inevitably see more use of fiscal/regulatory policy to control inflation, whether that is motivated by MMT or some other school of thought. But we're just at the very beginning of figuring out what such policies would look like.